RISHI Sunak is considering giving six million people a one-off £500 benefit payment as part of plans to fight off a rebellion over Universal Credit.
The lump sum would be an alternative to continuing boosted payments for Universal Credit claimants, which have temporarily been increased by £20 a week.
The increased payments were introduced for 12 months to help struggling families during the coronavirus pandemic and are scheduled to end in April 2021.
It applies to all new and existing Universal Credit claimants and amounts to an extra £1,040 over the year.
But amid calls from Labour to extend the uplift, the Chancellor yesterday met Prime Minister Boris Johnson and Work and Pensions Secretary Thérèse Coffey to discuss alternatives to the £20 weekly increase, according to The Times.
It comes as the furlough scheme is due to end in March, which experts fear could see a significant rise in unemployment.
However, it’s unclear how soon the £500 payment could be dished out, or if it would be available to all Universal Credit claimants.
Resolution Foundation think tank chief exec Torsten Bell said: “There are two challenges with this kind of approach.
“It doesn’t deal with the long-term challenge, that our basic rates of benefits don’t provide adequate protection when people have a tough time. They are too low.
“The second challenge, which relates specifically to protecting families, is that if we do it as a lump sum for people who are currently on universal credit lots of people who become unemployed later in the year will not benefit. It wouldn’t target those who need it.
“The minimum the government should do is extend the uplift for another year but the truth is we need a permanently higher basic level of protection.”
Mr Sunak last week said he will hold off on announcing the decision on whether to extend the benefits uplift until the Budget on March 3.
It’s thought around 50 Tory MPs representing seats in the North and Midlands have called on the Chancellor to extend the Universal Credit increase and business rate rebates for the duration of the third national lockdown.
Earlier this week, Mr Johnson fuelled speculation that the Government will end the £20 uplift – telling MPs that the focus will be on creating jobs over welfare.
The PM told the Liaison committee: “What we want to see is jobs. We want to see people in employment, we want to see the economy bouncing back.
“Most people in this country would rather see a focus on jobs and growth in wages than focusing on welfare but clearly, we have to keep all these things under review.”
The Sun has contacted the Treasury for comment.
The Chancellor has this week rejected a proposal for an emergency wealth tax to cover the £280billion the Government has spent on the pandemic.
Mr Sunak was presented with plans for a one-off levy – which would tax Brits with assets of more than £500,000.
Meanwhile, experts are warning the UK faces a possible double-dip recession once the true impact of a third national lockdown on the economy is revealed.
A double-dip is recession when the economy shrinks, briefly recovers, and then enters recession again.
Chancellor Rishi Sunak said: “It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face.
“But there are reasons to be hopeful – our vaccine roll-out is well underway and … we’re creating new opportunities for those most in need.”
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